Freeport's copper concentrat exports will only temporary ease global shortages
Sources in the industry said that Freeport-McMoRan’s unit, located in Indonesia, will help ease global shortages of copper concentrate, but only for a short time and if Indonesian authorities allow it.
Since last year, the competition for copper concentrate has intensified due to shortages caused by stoppages at First Quantum's operations and China's massive expansion in smelters.
In October, a fire at PT Freeport Indonesia (PTFI), a $3.7 billion Manyar smelter, halted operation. PTFI's ownership is split between Freeport and the state-owned Indonesian firm MIND ID with 48.8% each.
One source familiar with the situation said: "The amount of Freeport exports depends on how long it will take to fix the issue." She added that if the Indonesian government does not grant permits for (exports), Freeport could be forced to stop mining.
Manyar can process 1.7 millions metric tons per year of concentrate to produce 480,000 tonnes of copper cathode.
Sources with knowledge in the matter stated that the cause of the fire was still being investigated and had not yet been corrected.
Freeport McMoRan responded to a comment request by saying: "PTFI is currently working on remediation plans and has completed the initial damage assessment." PTFI expects to resume operations in mid-2025.
"PTFI works with the Indonesian Government to allow continued copper concentrate exports until the full ramp-up is achieved of PTFI’s new downstream processing facility, including requesting an increase in the allowed quota for 2020."
Indonesia's mining Minister Bahlil lahadalia said at an industry summit held last week that the government has yet to decide if it will approve Freeport’s request for an import licence.
Manyar was built in order to process copper from Freeport's flagship Grasberg Mine, Indonesia's second largest copper-gold mine. The Indonesian government wanted to discourage the export of concentrate.
Indonesia wants its miners to produce local metal to boost revenues and add value.
According to industry sources, Freeport's Concentrate will not solve the shortages that have affected the treatment and refinement charges (TC/RCs), which are paid by the miners when they buy concentrates to be converted into metal.
Sources say that Antofagasta, a Chilean copper miner, and Jiangxi Copper have recently agreed to significantly lower processing fees on copper concentrate for 2025.
In April, treatment charges were negative for the first ever time. This meant that smelters paid miners instead of receiving payment to convert concentrate into metal. Alexander Smith (Reporting and editing)
(source: Reuters)
